For years, the Ethereum ecosystem has repeated a mantra as seductive as it is ambiguous: decentralized governance. We have been told that any ETH holder can propose improvements, that decisions are made in open forums, and that DAOs (Decentralized Autonomous Organizations) represent the future of human coordination without hierarchies.
Yet when you lift the hood and observe how decisions that affect hundreds of billions of dollars in value are actually made, you discover a much more down-to-earth power structure: a technocracy that concentrates authority in a handful of developers, researchers, and, above all, in the figure of Vitalik Buterin. The question is no longer whether Ethereum is a genuine DAO, but whether decentralization is nothing more than a kind disguise for a form of government the West has known for centuries: the rule of those who know.
It is worth starting with the terms. A pure DAO delegates decisions to token holders, under the assumption that economic ownership grants political rights. A technocracy, on the other hand, hands power to technical experts, scientists, and engineers who master a subject inaccessible to the average citizen.
In Ethereum, the balance tips overwhelmingly towards the latter. Most relevant decisions are not even put to a formal vote; they are cooked up in All Core Developers calls, in GitHub repositories, and in informal conversations among the teams that maintain the main clients, with Geth at the forefront.
If you own a hundred thousand ETH but do not understand cryptography or game theory, your real influence is almost nil. If, on the other hand, you are one of the five or ten reference developers, your word defines which EIP (Ethereum Improvement Proposal) moves forward and which dies in a forgotten pull request.
The most emblematic case of this tension between the democratic myth and the technocratic reality occurred in 2016, with the collapse of the original “The DAO.” An attacker exploited a flaw in the code and drained millions of dollars in ETH. In strict blockchain terms, code was law; the transaction was valid, regardless of how much it damaged the system’s trust.
But the community, led by the Ethereum Foundation and with Vitalik Buterin’s explicit backing, decided to intervene. A hard fork was executed to rewrite history and return the funds. That decision, pragmatic as it might have been, blew up the principle of immutability. And it did so because a technical elite defined that the ecosystem’s integrity was above the code. It was a deeply political decision, and it was made by the experts.
Almost a decade later, the power structure has not democratized; it has simply become more sophisticated. In 2024, Péter Szilágyi, former lead developer of the Geth team, wrote an open letter that shook the ecosystem. He stated bluntly: “Ethereum may be decentralized, but Vitalik absolutely has complete indirect control over it.” According to Szilágyi, there is a ruling elite of five to ten people that will never relinquish control.
His account describes a system where Buterin’s attention, public opinions, and donations determine which projects receive funding, which proposals gain legitimacy, and which narratives prevail. It is not a dictatorial imposition, but a soft, almost paternalistic control. The ultimate goal of an entrepreneur building on Ethereum is not to convince an assembly of holders: it is to get the green light from that inner circle.
An even more illustrative episode was that of the ProgPoW proposal. Designed to hinder mining with specialized hardware and favor consumer graphics cards, the initiative obtained 93% support in a community vote. The numbers suggested overwhelming backing, the kind that in any liquid democracy would be enough to implement a change. However, ProgPoW was quietly shelved. It met with frontal opposition from important DeFi projects and, what proved decisive, with Buterin’s subtle disapproval, who called it a distraction.
That 93% was not powerful enough against one person’s opinion reveals where real sovereignty lies. The vote, in this case, was performative: the community could express itself, but the decision had already been made at another level.
The DAO façade that is sometimes invoked when talking about Ethereum is, therefore, a generous metaphor. In a conventional DAO, the token is power: more coins, more votes. In Ethereum, ETH holders —unless they are active developers or part of the circle of trust— do not vote on protocol upgrades. Governance happens off-chain, in a labyrinth of forums like Ethereum Magicians, biweekly calls, and public repositories.
This may be more deliberative and less prone to whale capture, as Buterin himself argues, but it is not democratic in any traditional sense. It is a reputation system, and reputation inevitably concentrates around those who have spent a decade writing the code and setting the project’s vision.
It is paradoxical that the harshest critic of this model is, at the same time, its main beneficiary. Vitalik Buterin has repeatedly railed against token-based governance, calling it plutocratic, inefficient, and vulnerable to short-termist whale tyranny. His proposal of “minimum governance” seeks to limit the power of DAOs so the community does not have to vote on every technical detail, avoiding what he calls “decision fatigue.” The irony is evident: by denouncing the plutocracy of tokens, Buterin justifies a plutocracy of knowledge.
The question the ecosystem avoids answering is why we should trust that an elite of five to ten people, however brilliant they may be, will make fairer and more sustainable decisions than a broad community of economic agents with skin in the game.
To be fair, there are arguments that nuance this critical view and distance it from the caricature of a technical dictatorship. Ethereum’s off-chain governance process is much more open than the internal workings of any traditional tech company. Anyone can submit an EIP, anyone can follow the developer calls, and anyone can set up an alternative client if they disagree with the majority direction.
The network, moreover, is ultimately a community of users and node operators who voluntarily decide which software to run. If Vitalik Buterin and his cohorts made catastrophic decisions, the community could fork the network without asking permission, something that already happened with Ethereum Classic. This permanent possibility serves as a counterweight to the technical elite’s power: their authority depends on being perceived as legitimate, not on coercion.
Likewise, one could argue that Ethereum is going through a transitional phase. The technical complexity of problems such as scalability, quantum resistance, or decentralized staking demands strong, specialized leadership. Without a technocracy charting the course in these foundational stages, the project could derail from an excess of populism and fall into decision-making paralysis.
The alignment of long-term interests —developers, investors, and users all want Ethereum to succeed— mitigates the risk that the technical elite imposes purely personal or extractive agendas. It is not a closed oligarchy that perpetuates itself to bleed the system, but a group of experts who share an almost ideological commitment to the protocol’s success.
However, the fact that the technocracy is benevolent and exists for a good reason does not make it a DAO. It only makes it an enlightened technocracy. The term “disguised DAO” does not necessarily imply bad faith; it may simply be a collective self-deception or a marketing strategy that the ecosystem has embraced so forcefully that it no longer distinguishes between its aspiration and its reality. But words matter, especially when the discourse of decentralization is used as a regulatory shield and as a magnet to attract retail capital that believes it is participating in an experiment of digital democracy.
Ethereum’s hybrid structure, halfway between meritocratic anarchy and a republic of sages, has been a source of inspiration and criticism for other projects. Charles Hoskinson, founder of Cardano, openly called it a “dictatorship” and proposed an alternative model with elected representatives and a formal constitution. But, seen with a certain historical perspective, Ethereum’s governance resembles that of science more than that of a modern state.
The theoretical physics community, for example, does not elect Einstein: his ideas impose themselves because they better explain reality and because his peers validate them through an open peer review process. Something analogous happens in Ethereum: the technical leaders’ ideas are validated in public debate and in the voluntary adoption of code. The crucial difference is that, if general relativity fails, a star does not collapse; if an Ethereum upgrade fails, billions of dollars vanish and the lives of thousands of people are affected.
That material responsibility makes the community tolerate, and even demand, a degree of centralized control that would be unacceptable in other contexts. We prefer a team of brilliant engineers to design an airplane engine before we board it; we do not ask to vote on every screw. But then we should not call the airplane a “popular assembly.” We should call it what it is: an engineering system governed by experts, with an exit mechanism for those who disagree.
The real risk of this disconnect between discourse and reality is not that Ethereum will collapse, but that an immovable caste will consolidate itself without the checks inherent in a mature technocracy. If power rests solely on reputation and interpersonal trust, the doors are left open to favoritism, paralyzing conservatism, and systematic exclusion of dissident voices.
The ecosystem’s plurality —with multiple client teams, independent researchers, and a Foundation that in theory only funds, does not control— is the only guarantee that this caste does not become a politburo. But that plurality is fragile and depends on a real willingness to listen and on Vitalik Buterin practicing the institutional humility he preaches.
Ethereum is not a DAO. Nor is it a dictatorship. It is a governance laboratory that has found, almost by accident, a balance between technocratic efficiency and a certain ideal of open participation. It works because the tightrope walker is exceptionally skilled and because the network has accumulated an enormous capital of trust.
But the DAO disguise is wearing thin. There comes a moment when metaphors stop reassuring and start confusing. Perhaps the time has come for Ethereum to abandon the language of automatic decentralization and state clearly: it is a technocracy with social checks and balances.
